Sui Southern Gas Company set to buy Progas Pakistan Ltd
Karachi: Sui Southern Gas Company (SSGC) has finalized its plan to buy Progas Pakistan Limited, one of the largest LPG infrastructure and marketing companies.
According to Alfalah Securities Limited, Progas is in liquidation and has the assets valued at PkR 6 bn against secured/unsecured liabilities of PkR 2 bn. The replacement value of these assets is estimated to be over Rs10 billion. SSGC has been planning to enter into an entire LPG supply chain i.e. extraction, storage, bottling and distribution business. These acquired assets shall be held by SSGC LPG Ltd (SLL) which is its subsidiary dealing with LPG.
Progas Pakistan Limited is the largest LPG infrastructure and marketing company in Pakistan with its own dedicated import handling terminal at Port Qasim. The assets include a fully functional multipurpose Jetty, Trestle, LPG storage facility (6,750 MT) and downstream logistics and filling plants. The annual terminal capacity is 2 million tons and the terminal can handle up to 15,000 DWT vessels with provisions to handle up to 80,000 DWT vessels for LNG imports at additional cost.
However, SLL will have to obtain licences from OGRA and EPA clearance and negotiate concessions with the Port Qasim Authority. The annual indigenous LPG production is around 580,000 MT, additionally 109,500 MT is imported. While the local production is expected to remain flat, the imports will rise substantially to 1.8 million MT by 2020, to cater to increased demand, growing at over 8 percent annually.